Thanks for the responses! I'm currently looking at a cylinder block schematic on CSMNL and can't spot an o-ring that goes into that corner/oil passage? Seems only a dowel goes into that hole or am i reading the image wrong? It's also possible, since I dont know the history of my engine, that the cylinder block isn't K3. Theres no groove for an o-ring on the cylinder block surface...does something go into the dowel?
What could explain the leak if the damage to the cylinder block top surface isn't at fault?
Thanks!